OFS Energy Fund has completed a one-and-done closing on its third private equity fund. The vehicle was oversubscribed at its $175 million hard cap.
OFS Energy Fund (“OFS”) has completed a one-and-done closing on its third private equity fund which was well oversubscribed at its $175 million hard cap. The fund will maintain the focus of acquiring and recapitalizing middle-market companies in the energy service industry. Fund I was a $47 million private equity fund raised primarily from energy industry executives and closed in 2008 and has achieved in excess of four times cash-on-cash returns. Fund II is a $90 million private equity fund that is 80% deployed with six remaining platform companies and two other companies that sold for approximately four times cash-on-cash return. Fund II limited partners included many Fund I limited partners plus several new institutional investors.
In addition to a number of energy industry executives with substantial operating experience who invested previously in Fund I and Fund II, Fund III has new limited partners including an Ivy League university endowment, a private pension plan for a Fortune 100 company, a private charitable endowment, multiple public pension plans and fund of funds investors ..
Combining Fund II and Fund III, OFS has $265 million under active management.
“We are very honored to have the opportunity to continue to work with sophisticated private and public institutional investors as well as our core of energy industry executives who have invested across Fund I to Fund III. We are also pleased to have our portfolio company CEOs from Fund I continue to invest in Fund II and Fund III reflecting their belief in our ability to find good company investments and add value as we work with our management teams to rapidly grow the underlying business,” said Bruce Ross, managing partner of OFS.
The entire operating team from OFS’ prior funds remains together to manage Fund III. This includes Bruce Ross, Jerad McMayon, Scotty Reynolds, Ross Canion and Logan Kelley. Two more members have joined the team to help manage Fund III. Frank Schageman, former CFO of R360 Environmental Solutions, has joined OFS as an Operating Partner where he oversees portfolio company initiatives and assists the deal team in evaluating transaction opportunities. Robert Whilden, former Executive Vice President of Continental Energy Services, has joined OFS as a Principal where he assists in identifying, evaluating and executing new investments as well as supports various portfolio company initiatives.
OFS’ team has significant experience in the energy service market, including direct executive operating responsibilities, which has provided a significant benefit between OFS and companies looking for capital and experience to support rapid growth. OFS’ investment strategy is to acquire and grow lower middle market energy service companies with enterprise values between $5 million and $150 million.
OFS also has five industry advisors who are very active in the energy industry with ongoing responsibilities as owners and managers of various oilfield businesses. These advisors create additional value for the OFS team and its portfolio companies through their active market involvement and experience.
Houston-based OFS Energy Fund is one of the few professionally managed private equity firms that specialize in acquiring and recapitalizing lower middle-market energy service companies. OFS seeks to provide capital to business owners including buyouts, recapitalizations and growth equity investments. The Fund supports the development of management, appropriate governance, professionalization of reporting and tracking of operating metrics. Additionally, OFS lends industry relationships, ideas for operational improvement and support in developing strategic growth plans and initiatives.